Justice H K Srivastava allowed Shahabuddin's prayer for bail in the case in which the man was killed by unidentified persons.
Police had later found his alleged involvement in the crime and approached the lower court to remand him to judicial custody early this year.
Shahabuddin facing life imprisonment in another case related to kidnapping-cum-murder of a CPI-ML (L) worker would, however, remain in judicial custody. He is currently lodged in Siwan jail.